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to integrated green supply chains, and reverse logistics (Zhu, Sarkis, & Lai,
Confirmation of a measurement model for green supply chain management
practices implementation., 2008) and it roots in both environmental management
and supply chain management literature (Shrivastava, 1995). A recent and more
holistic definition of GSCM is provided by (Wu & Pagell, 2010), who describe it as
the integration of environmental thinking into supply chain management, including
product design, supplier selection and material sourcing, manufacturing processes,
product packaging, delivery of the product to the consumers, and end-of-life
management of the product after its use.
As such, GSCM ranges from green product design to a closed loop product return
processing, and requires high-level and detailed planning and steering of complete
supply chains on an end-to-end basis.
Previous contributions have discussed both general environmental management
issues within the supply chain (Klassen & Whybark, 1999), and specific green facets
of supply chain management such as green design (Hsu, Chen, & Chiou, 2011)
production planning and control for remanufacturing, green manufacturing, product
recovery, reverse logistics, and logistics network design (Diabat, Khodaverdi, &
Olfat, 2013).
Within the broad concept of GSCM, GSCP refer to a variety of activities and
initiatives implemented by an organization in an attempt to reduce their impact on
the natural environment (Zhu, Sarkis, & Lai, Confirmation of a measurement model
for green supply chain management practices implementation., 2008). According to
Vachon and Klassen (2006), GSCP encompass both internal and external activities,
whether related to preventing pollution before it is generated, recycling waste and
spent products, extracting resources and raw materials, or capturing harmful
pollutants followed by proper disposal. In a slightly different way of clustering, (Zhu
& Sarkis, An inter-sectoral comparison of green supply chain management in China:
drivers and practices., 2006) have broken down the examined GSCP into: internal
environmental
management;
environmental
concerns;
green
investment
purchasing;
recovery;
customer
and,
cooperation
eco-design
with
dimensions.
2007).
Numerous
academics
have
come
up
with
hypothetical
propositions and models for why companies act green, but these models largely
remain empirically untested. Since motivation is often described as a multifaceted
phenomenon, it implies that it will operate differently in different contexts, and
how it works may depend on the nature of the problems for which it is the purported
solution (Suchman, 1995).
In this study I am trying to understand the different factors which influence an
organization to pursue GSCM the decision making process of a firm facing
uncertainties in GSCM practices.
GSCM Motivation
It is imperative to consider a companies environmental motivation separate from
corporate strategies when evaluating GSCM initiatives. In many cases, corporate
greening strategies are often not aligned with practice (De Bakker & Nijhof, 2002).
(Bansal & Roth, 2000) distinguish three different types of motivations for ecological
responsiveness: a legitimization, a competitiveness and an ecological responsibility
motivation.
Legitimization
Competitiveness
According to the competitiveness motivation, having GSCM is both a need and an
opportunity. Firms that focus on greening their inbound function and production will
benefit from the fact that this leads towards overall supply chain environmental
improvements as well as economic performance and increased competitiveness
(Walker, Di Sisto, & McBain, 2008). Green initiatives improving competitiveness
might include energy and waste management, source reductions resulting in a
higher output for the same inputs, eco-labeling and the development of ecoproducts (Bansal & Roth, 2000). Moreover, consistent with the resource-based view,
firms try to develop ecologically related resources and capabilities to build longterm profit potential such as improved reputation, process efficiencies and product
reliability (Vanpoucke, 2014). Subsequently, these firms benefit from increased
profits, larger market shares (due to possible differentiation) and lower costs
(Bansal & Roth, 2000). In summary, environmental initiatives are driven here by the
ability to enhance a firms financial performance.
Some firms pursue ecological initiatives because they have an innate concern for
the environment. Ecological responsibility as a motivation focuses on improving
employee morale and individual satisfaction. These firms act based on values and
not on decision rules: they act out of a sense of obligation, responsibility, or
philanthropy rather than out of self-interest. These firms, in which top management
is responsible for the firms environmental management leadership, idealize, rather
than rationalize, the best course of action (Chan, He, Chan, & Wang, 2012).
Stakeholder pressure
Existing literature has been focusing extensively on different taxonomies to explain
which stakeholders pressures are taken into account by corporations when GSCM
decisions are made. The common belief is that at least the following pressures
should be taken into account: regulators, internal/external stakeholders as well as
primary/secondary stakeholders. In the past, some stakeholders have been studied
more often than others.
incentives for firms to set-up sustainable supply chains. Important pressures that
previous research took into consideration included regulators, customer demands,
response to stakeholders, competitive advantage, environmental/social groups, and
reputation loss. Similarly, (Hsu, Chen, & Chiou, 2011) have presented a
driver/pressure classification, which have been empirically shown to pressure
corporations into adopting environmental initiatives. This classification has the
following categorization: regulatory stakeholders, internal primary stakeholders,
external primary stakeholders and secondary stakeholders (Vanpoucke, 2014).
Regulatory stakeholders
They include governments, trade associations, informal networks, competitors and
stakeholders who are able to convince the government to adopt other or additional
environmental practices or technologies (Henriques & Sadorsky, 1999). On the one
hand,
legislative
performance
bodies
have
requirements,
environmental
material
regulations
mandates
and
which
extended
focus
on
producer
responsibility legislation (Paquette, 2006). This has proven to be costly for firms
when legislation does not leave space for flexibility and mobility. On the other hand,
there are also government encouraged voluntary approaches which have been very
effective in the past. This approach has been better accepted by the private sector
than prescriptive mandates and can be less costly than traditional command and
control systems, which generally impose a significant administrative burden on
regulators for monitoring and enforcement (Vanpoucke, 2014).
Industries continually evolve and change, and if firms do not respond to these
changes they may lose their market position and consequently their customers.
Firms that operate below the industrys environmental standards may lose their
competitive advantage and market share (Buysse & Verbeke, 2003). In the same
way, a firm may attain or retain their competitive advantage and thus their financial
position through first-mover environmental initiatives (Buysse & Verbeke, 2003).
Furthermore, firms can go a step further and can affect their industry dynamics as
well as the industries barriers to entry by setting industry norms and/or legal
mandates. Thus, external competitors may act as a driver for GSCM as they are able
to influence their industrys dynamics, innovation, performance and competitive
advantage (Walker, Di Sisto, & McBain, 2008).
Non-governmental organizations (NGOs) are an additional player in affecting the
competitive environment. Many NGOs affect consumer behavior with regards to the
adoption of more sustainable ways of living and discouraging unsustainable
behavior (e.g., International Institute for Sustainable Development, 2010). NGOs
utilize negative as well as positive information to convince consumers, firms and
governments to change their behavior. It has been found however, that negative
information has a greater impact on behavior than positive information. Firms
therefore need to be careful as NGOs appear to be able to punish unsustainable
firms. Many firms proactively collaborate with NGOs in order to find sustainable
solutions and ensure a positive company reputation.
Company Characteristics
Besides stakeholders being driving forces towards an environmental program
adoption, firm characteristics may also be considered as a possible influencer of a
firms GSCM motivation. Business characteristics that have an influence on a firms
GSCM proactivity include company size, environmental management systems, ISO
14000 certification, and how often environmental performance is measured. Firm
size may influence the implementation of environmental practices as larger firms
have more resources available to devote to environmental initiative and receive
greater pressure from stakeholders than smaller firms. Also, firms with ISO 14000
and environmental management systems in place tend to have a greater
environmental focus. The same could be true for how often environmental
performance is measured by companies (Vanpoucke, 2014).
Performance outcomes
During the past decades academics have discussed from a theoretical point of view
the relationship between corporate social performance (acting ethically and
ecologically) and economic performance. One perspective dictates that it pays off to
be green (Russo & Fouts, 1997). This perspective is supported by the resource
based view which supports the notion that organizations can focus on the
environment but have economic performance at the same time. Others question
whether it actually pays off to be green. These academics believe that business
organizations exist to maximize profit of the stockholders. (Preuss, 2005), however,
argues that many companies have not reached this point yet, except large firms.
Thus, there is no theoretical consensus as to what the relationship between
economic and environmental performance is. In addition to no theoretical
consensus, mixed empirical results are found relating to what type of outcomes
firms can expect. He evaluated existing literature and found that almost half of
about 100 studies showed a positive relationship between corporate social
responsibility (CSP) and financial performance, while only seven reported a negative
relationship. However, many researchers researching CSP and GSCM tend to
enquire
for
only the
benefits
obtained
by green
initiatives and
not the
disadvantages associated with GSCM practices. A possible reason that there exists
no consensus between environmental management and firm performance is
because motivation has not been incorporated. Motivation drives behavior and thus
also the outcomes. Thus, it would be expected that the type of motivation firms
have towards GSCM, will affect the type of relationship these firms will encounter
between economic performance and environmental performance (Klassen &
Whybark, 1999).
complexity
of
measuring/monitoring
suppliers
environmental
practices);
technology (e.g., lack of technical expertise, lack of human resource, lack of
effective environmental measures);
knowledge (e.g., lack of environmental knowledge, perception of out-ofresponsibility zone, disbelief about environmental benefits);
financial (e.g., financial constraints, non-availability of bank loans to
encourage green products/processes, high investments and less return-oninvestments);
Involvement and support (e.g., lack of customer awareness and pressure
about GSCM, lack of corporate social responsibility, lack of top management
involvement in adopting GSCM, poor supplier commitment).
In general, both internal and external factors can be identified. Focusing on internal
barriers, companies seem to be hampered by economic or financial factors. Such is
the case of the emerged difficulty in taking on investment risk, especially when no
incentives for sustainable supply chain management are available. Besides, there is
great difficulty in quantifying the costs coming from adoption. A second element
that seems to act as an obstacle lies in the long implementation periods. Third, a
general lack of awareness has been remarked the investment is sometimes not
perceived as being necessary, and this prevents companies from implementation.
Fourth, companies seem to perceive some operational challenges, mostly due to
personnel training or a lack of knowledge.
As far as external barriers are concerned, inhibition towards innovation and lack of
knowledge has been identified. Lack of integration among players in the supply
chain (i.e., suppliers and customers), and specifically the scarce attitude towards
collaboration, has also been identified by (Vachon & Klassen, 2006).
My Research Goals
Main focus of my research in the upcoming years is to identify major barriers in
implementation of GSCP in multi-tier supply chains faced by the industries in
Canada. I have extensively studied the motivation behind green supply chain
management in the past couple of months and all that I have understood from my
readings, I have presented in my paper. There is a big gap in academic research and
industrial practices of green supply chain currently, and my goal is to take at least
one small step to bride this gap. This field in its entirety has been around for more
than two decades but no big game-changing effect has been observed in the
industry, despite the claims of various big firms about reduction in their carbon
footprint. I want to look deeper into this issue, find a challenge inhibiting GSCP
adoption and gear my research towards it.
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